Money Talks is a business column from CBC radio.
By Michael Hlinka, CBC business columnist:

There's an old saying that goes something like this: If you owe the bank $10,000, it controls your life. However, if you owe the bank $10 million, you control the bank, These words came to mind when I read a report about how much U.S. debt the Chinese government and its people are holding.

It stands at a staggering $775 billion, a tremendous amount of money.  But it has come down in the past several months ... and that trend may be as important part a of the story as the amount still outstanding.

How did it come to this? How is it that the United States, understood as the world's foremost economic superpower, came to owe so much to a large and heavily populated, but relatively under-developed country?  

It's quite simple really. Over the past decade, China has been producing and selling while American citizens have been buying and consuming.  In 2001,imports from China exceeded exports to China by about $83 billion.  Seven years later, that swelled to $268 billion before coming down a bit in 2009 as the United States suffered through its most severe recession in a generation.

When one country - in this case, China - has a bunch of another country's currency, it can do several things with it.

First, it could buy more stuff. That's what the American government would prefer that China do. The Obama administration would love the Chinese to go on a U.S.-style spending spree because that would create jobs in the United States.  

The second-best option, at least from the perspective of the United States, is for China to continue to purchase U.S. debt securities. They're paying almost nothing in interest and this is one of the reasons why I suspect that China seems far less interested right now.  

There is another way to spend that dough, though ... one that should be giving thinking American politicians a sleepless night or two. What if China took those $775 billion and used them to buy shares in major publicly traded American companies?

China has enough money right this second to buy every single share of every single company that trades on the Toronto Stock Exchange.

Want another investment idea? China's U.S. dollar holdings are sufficient to achieve 10 per cent ownership - what is generally understood as a control position - in each company in the Standard and Poor's 500.  These are the 500 biggest and most important American-based corporations.  

All of a sudden, it doesn't really matter how much you owe the bank because at that point you own it ... and everything else for that matter.